If a firm that produces carrots operates in a perfectly competitive industry, then
A) the demand for the firm's carrots must be horizontal.
B) the demand by individual consumers for carrots must be horizontal.
C) the market demand for carrots must be horizontal.
D) All of the above must be true.

Question

Quizplus · Accepted Answer

In a perfectly competitive industry, each firm faces a perfectly elastic (horizontal) demand curve for its product because it is a price taker and can sell as much as it wants at the market price. Choices B and C are incorrect because individual consumer demand and market demand curves are typically downward sloping, reflecting the law of demand.

If a Firm That Produces Carrots Operates in a Perfectly